March 04, 2007
Prefering 50% of 0 to 10% of rather more than zero
Among the items prevernting me from enjoyable blithering on about the MENA region, I have a fine project for a new financial sector development - greenfield, very profitable. Here in region of course, I am a glutton for punishement.
Now, this will be a brilliant thing to finance, if the actors can get serious. It should not really be that hard, except my good friend, one of the local partners (proposed) seems to believe that because he's related to X, Y and Z, who are key to getting an operating license, that this means he should not only get a job in management (fine by me, not a Sr. job, but I think everyone would feel fine giving him a growth position) and get a sweat-equity stake (although I had to explain the concept, including the concept that he actually had to put some work into the sweat part), but that he should get a controlling interest.
Now, that's a bit of a problem.
Above all as he's not bringing any great technical expertise, nor management track record, nor real actual equity, nor... well one gets the picture. He brings ... wasta to the table. Wasta is useful. Everywhere, not just in MENA land, but is particularly useful here.
But the international partner is bringing everything to the table - technology, systems, management expertise. Me, equity and outside equity....
And he wants a controlling interest? What the fuck? Bloody bollocks, 10-15% plus a place in the team is a fucking gift. I had to sit all day yesterday listening to him whinge on about how the proposition from the foreigners wasn't giving him his due of 51% and this was supposed to set him up.
Spoiled fucking wealthy Arab brats are some of the most insufferable little gits around.
Luckily he likes Cuban products.
Posted by The Lounsbury at March 4, 2007 05:55 PM
Filed Under: Biz - Private in MENA
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Wasta is useful and one probably wants to pay a price for it. But the rapacity of the wasta providers is often a deal killer. That's something that completely escapes me. The wasta providers' overvaluation of their services often makes them go beyond the other party's reservation price so they get nothing. Or, if they do, it means the other party indulges in bad management in the first place and they will hinder the business' development, the wasta will cost a lot more than whatever benefits it could bring, and the business will not grow and would even fail. It's definitely not in the wasta providers' interests, makes me think of the peasant who kills the goose that laid the golden eggs, and this is where their short-sightedness escapes me completely.
"the peasant who kills the goose that laid the golden eggs"
Completely off-topic, but I remember a science fiction book where a peasant got one of those, and pretty quickly died of radiation sickness from the high-energy whoosiwhatsits that were needed to work the transformations involved.
Posted by: Tom Scudder at March 4, 2007 09:38 PM
Wasta is a weird commodity. It's almost a zero-sum game. The more wasta others have, the less you have even though the absolute amount of wasta you have remains the same.
In way, I suppose, it behaves like any other commodity. It's not so much that you have less wasta when others have more, it's that the wasta you do have is worth less. When everybody has it, i.e. when there is open and transparent access to services, capital, regulatory approval, etc. based on merit, wasta has no value.
If you look at it this way, your friend's attitude makes a kind of perverse sense. This new project will be a significant source of wasta if it goes through. Think of all the opportunities just for patronage! Capturing all that new wasta for himself would enhance his share. Leaving it in the hands of someone else would diminish it. He may calculate (subconsciously, anyway) that it's better to kill the project than let the project go forward if he doesn't get a big enough piece of it. While the adage in the West is "half a loaf (or even a quarter) is better than none," a lot of power brokers don't think that way, especially in the developing world.
Secondly, do you get the sense that the spoiled fucking wealthy Arab brat has any interest in a "growth position," implying, as it does, taking orders and having to do actual work?
Posted by: Anonymous at March 5, 2007 05:18 PM